Video 2:11
Rice at rock bottom

Sarah ClarkeUpdated
Tue 22 Apr 2008, 11:59 AM AEST

In a good year it generates around $800 million but this year Australia's rice industry is at rock bottom.

Transcript

ALI MOORE: In a good year, it generates around $800 million, but this year Australia's rice industry is at rock bottom. Drought has seen the water hungry industry dry up and farmers are set to produce their worst crop since the 1920s. Even so, producers say the industry will recover, and they've fended off criticism that Australia is too hot to grow rice. More from Sarah Clark.

SARAH CLARK: After five years of droughts in the Riverina a flooded field is a rare sight.

NoeL GRAHAM, RICE FARMER: For a lot of people this will be getting towards the last throw of the dice.

SARAH CLARK: This is usually the biggest rice growing region in Australia. For the last few years farmers like Noel Graham haven't had a crop.

NoeL GRAHAM: There's 2,000 irrigation farms in Murray irrigation, probably all of those grow rice. This year I think there is five farms got rice in the Murray Valley.

SARAH CLARK: Traditionally Australia produces around one million tonnes of rice. Half of that is exported mainly to the Middle East and across the Pacific. Most of it is produced in New South Wales. With a small plant in northern Victoria. But the water intensive industry has had its production slashed by almost 90 per cent this year and growers are turning to other crops to survive. In a good year the rice crop would be able to support a regional community. But this year has been the smallest crop since the 1920s, and as a result the processing mill here in Deniliquin has had to be put on hold. The $26 million plant is the biggest in the southern hemisphere. And would normally employ around 120 people. Now it employs only maintenance staff and hasn't process added grain of rice since December. Even so, farmers say there's still a future for rice growing in Australia.

LES GORDON, RICEGROWERS ASSOCIATION: It's a lot of water but it's also a lot of meals. In a world that's facing a looming food shortage, it's a great way to convert water to meals there's no doubt about that.

SARAH CLARK: In fact Australian rice growers use five times less water than growers overseas to produce a kilo of rice. But without water the outlook looks grim.

LES GORDON: It will recover no worries. We produce a quality product. It's internationally recognised as a quality product. We just need water and everything will go back to normal, whatever that might be.

SARAH CLARK: With growers in this region facing a second year with no water allocation and only a five per cent crop planted industry recovery may take years.